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Battlefields and Marketplaces

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Author Info

  • Mehlum, Halvor

    () (Dept. of Economics, University of Oslo)

  • Moene, Karl-Ove

    () (Dept. of Economics, University of Oslo)

Abstract

Divided societies in the developing world experience wasteful struggles for power. We study the relationship between political stability and resources wasted in the struggle within a model of competitive power contests. The model of power contests is similar in structure to models describing oligopolistic market competition. This analogy helps us in deriving results that are new to the conflict literature. We show, for example, that the Herfindahl-Hirschman index can be interpreted as a measure of power concentration and that a peace treaty between Þghting groups have a parallel in tacit collusion between firms in a market.

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File URL: http://www.sv.uio.no/econ/english/research/memorandum/pdf-files/2002/Memo-11-2002.pdf
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Bibliographic Info

Paper provided by Oslo University, Department of Economics in its series Memorandum with number 11/2002.

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Length: 16 pages
Date of creation: 16 Jun 2003
Date of revision:
Handle: RePEc:hhs:osloec:2002_011

Contact details of provider:
Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Email:
Web page: http://www.oekonomi.uio.no/indexe.html
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Related research

Keywords: Violent conflicts; Rent-seeking games; Herfindahl-Hirschman index; Oligopolistic competition;

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References

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  1. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  2. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  3. Moene, K.O., 1992. "Contested Power," Memorandum 19/1992, Oslo University, Department of Economics.
  4. Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
  5. Tangerås, Thomas P. & Lagerlöf, Nils-Petter, 2002. "Ethnic Diversity and Civil War," Working Paper Series 589, Research Institute of Industrial Economics.
  6. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September.
  7. Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
  8. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-74, August.
  9. Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
  10. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
  11. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
  12. Grossman, Herschel I, 1994. "Production, Appropriation, and Land Reform," American Economic Review, American Economic Association, vol. 84(3), pages 705-12, June.
  13. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
  14. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-89, March.
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Cited by:
  1. repec:ebl:ecbull:v:8:y:2008:i:2:p:1-11 is not listed on IDEAS
  2. Mehlum, Halvor & Ove Moene, Karl, 2011. "Aggressive elites and vulnerable entrepreneurs - trust and cooperation in the shadow of conflict," Memorandum 16/2010, Oslo University, Department of Economics.
  3. Caruso, Raul, 2007. "Conflict and Conflict Managment with Asymmetric Stakes (The Bad-Cop and the Good Cop part II)," MPRA Paper 1438, University Library of Munich, Germany.
  4. Silje Aslaksen & Ragnar Torvik, 2006. "A Theory of Civil Conflict and Democracy in Rentier States," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 571-585, December.
  5. Kai A. Konrad & Stergios Skaperdas, 2005. "Succession Rules and Leadership Rents," CESifo Working Paper Series 1534, CESifo Group Munich.
  6. Philipp Denter & Dana Sisak, 2010. ""Who's the thief?": Asymmetric Information and the Creation of Property Rights," University of St. Gallen Department of Economics working paper series 2010 2010-27, Department of Economics, University of St. Gallen.

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